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21st April 2020

COVID-19: New changes to Statutory Sick Pay entitlement and guidance on how to reclaim Statutory Sick Pay

21st April 2020

COVID-19: New changes to Statutory Sick Pay entitlement and guidance on how to reclaim Statutory Sick Pay

Sarah Hayes

Posted: 21st April 2020

T: 023 8048 2165

E: Email Me

COVID-19 has resulted in several changes to Statutory Sick Pay (“SSP”) entitlement. The most recent changes, published on 19 April 2020, impact upon who is eligible to receive SSP and how sickness absence will interact with the Coronavirus Job Retention Scheme (better known as “Furlough Leave”).

These frequent updates and changes mean that employers need to exercise real care in relation to employees who are in receipt of, or are potentially entitled to claim, SSP.

This blog also introduces the new Coronavirus Statutory Sick Pay Rebate Scheme with some guidance on how the scheme will operate.

What impact has COVID-19 had on the Statutory Sick Pay guidance?

We have set out a summary of the key points which employers should be aware of in relation to the impact of COVID-19 on the Statutory Sick Pay guidance.

Reduction in waiting days

Normally, in order to be eligible for SSP, an individual must:

  • be classed as an employee and have done some work for their employer
  • have been ill for at least 4 days in a row (including non-working days)
  • earn an average of at least £118 a week
  • tell their employer they’re sick before any deadline that the employer may have specified for notifying absence, or within 7 days if they do not have one

However, following COVID-19 guidance, if an employee is absent because of COVID-19 they are able to claim SSP from the first day of their absence, and they no longer have to wait for the 4 waiting days.

Who is entitled to SSP and are individuals that are shielding eligible?

If an employee is off sick due to COVID-19, they will be entitled to SSP. The Statutory Sick Pay (General) (Coronavirus Amendment) Regulations 2020 then introduced a provision which provides that a person is deemed incapable of work where they are:

“isolating themselves from other people in such a manner as to prevent infection or contamination with Coronavirus, in accordance with guidance published by Public Health England, NHS National Services Scotland or Public Health Wales…and by reason of that isolation is unable to work.”

In effect, this confirmed that SSP is payable to those self-isolating and unable to work as a result of government guidance. This removed the strict requirement for the employee to be personally ill, and covered, for example, those self-isolating at home because someone in their household was displaying symptoms.

The initial regulations did not outline what would happen to individuals that were “shielding.” Shielding individuals are those that are extremely vulnerable and at very high risk of severe illness from Coronavirus because of an underlying health condition and have been advised to follow shielding measures. It was previously unclear whether these individuals would be entitled to SSP.

On 16 April 2020, the government provided clarification on shielding individuals through the Statutory Sick Pay (General) (Coronavirus Amendment) (No. 3) Regulations 2020. The amended regulations provide that a person is deemed incapable of work if they are unable to work because they fall within the extremely vulnerable category and have been advised to shield. This is significant as it means that an employee who is shielding in line with public health guidance will be entitled to SSP. These regulations do not appear to apply retrospectively.

Evidence of sickness

The general legal position is that medical evidence is not required for the first 7 days of sickness. Thereafter, a fit note recording the reasons for the absence is required. However, if the sickness absence is as a result of COVID-19, a fit note is not strictly required. Employers can either keep a note of the reason for absence or they can ask an employee to provide an ‘isolation note’ by visiting NHS 111 online, rather than visiting a doctor.

How does Furlough Leave interact with SSP entitlement?

The recent Treasury Direction published on 15 April 2020 states that where SSP is payable or liable to be payable in respect of an employee (whether or not a claim to SSP is made) at the time when the instruction to cease work is given, the 21-day period (being the minimum period of furlough) does not begin until the original claim or entitlement to SSP has ended.

The above therefore appears to mean that where an employee is off sick, and entitled to SSP (whether or not SSP is claimed), the employer cannot start the furlough period until they have returned from sick leave (or at least notionally because they won’t be returning to work probably). However, if this is the case, then this conflicts with the 15 April Guidance, which still says that an employee who is off sick can be put onto furlough leave, and the guidance has not been updated to reflect the Direction. For more detail, see our blog “Coronavirus Job Retention Scheme – Update 15 April“, which considers this in more detail.

On 19 April 2020, HMRC published the Statutory Payments Manual (SPM110700) to confirm that employees do not qualify for SSP if they are furloughed as part of the Coronavirus Job Retention Scheme.

The separate HMRC Employer Guide confirms that if an employee becomes ill whilst on furlough leave, the employer could move them onto SSP or can keep them on furlough, at their furloughed rate. However, if the employee is moved on SSP, the employer will no longer be able to claim for the furloughed salary. If employers keep the sick furloughed employee on the furloughed rate, they remain eligible to claim for these costs through the furloughed scheme.

The position with individuals that are “shielding” is less clear. As we outlined above, the guidance on 16 April 2020 confirms that individuals that are shielding are entitled to SSP. Based on the Treasury Direction, it would follow that those shielding for 12 weeks would need to complete the requisite period of shielding before being furloughed.

However, rather confusingly, the explanatory note to the Statutory Sick Pay (General) (Coronavirus Amendment) (No. 3) Regulations 2020 suggests that an individual that is shielding can be furloughed. The explanatory note does not expressly require the period of shielding to have come to an end before furlough leave commences. It is therefore unclear how this interacts with entitlement under the furlough leave and we await further clarification.

What is the Coronavirus Statutory Sick Pay Rebate Scheme?

On 3 April 2020, HMRC published guidance for employers to explain how they can claim back payments of SSP made to employees as a result of the COVID-19 pandemic. This new guidance reflects the provisions of the new Coronavirus Act 2020.

The Coronavirus Statutory Sick Pay Rebate Scheme (the Scheme) will repay employers the current rate of SSP paid to current or former employees for periods of sickness starting on or after 13 March 2020. The repayment will cover up to two weeks starting from the first day of sickness, if an employee is unable to work because they either:

  1. have Coronavirus; or
  2. cannot work because they are self-isolating at home.

The guidance states that employees do not have to submit fit notes for employers to make a claim.

Who qualifies for the Scheme?

The Scheme covers all types of employment contracts, including employees on agency contracts, employees on flexible or zero-hour contracts agency and zero-hours contracts. It can be used by employers if they:

  • are claiming for an employee who is eligible for SSP due to COVID-19;
  • had a payroll scheme that was created and started on or before 28 February 2020**;
  • had fewer than 250 employees on 28 February 2020.

Connected companies and charities can also use the Scheme if their total combined number of PAYE employees is fewer than 250 on or before 28 February 2020**.

** Given the updated guidance and direction published on 15 April 2020 (see our blog above), we consider that references to 28 February 2020 are likely to be updated in due course to refer to 19 March 2020.

What records must be kept?

HMRC instructs employers to keep records of all SSP payments they want to claim from the Scheme for at least three years following a claim. These records include the reason why an employee could not work, the period during which an employee could not work (including the start and end dates), details of an employee’s SSP qualifying days, and National Insurance numbers of all employees who have been paid SSP.

How do I claim back?

The online service that employers will need to use to make claims under the Scheme is not yet available, but the guidance will be updated when it is. We currently do not have any timescale for this. HMRC will inform employers when the Scheme will end.

If you would like to discuss any issues covered in this update please contact a member of the Employment team.

Our “Coronavirus – Legal advice and guidance” page is updated as and when new/amended guidance comes through from the Government and other regulatory bodies. You can now sign up to receive notifications as and when the page is updated by visiting the page and completing the sign up form.

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Sarah Hayes

Posted: 21st April 2020

T: 023 8048 2165

E: Email Me